1.0 Executive Summary
The purpose of this business plan is to secure $525,000 for the development of a group home based in Johnson County, Kansas. Group Home LLC (“the Company”) was founded of the intention of providing care for up to eight individuals in a home setting. Full scale revenue generating operations are expected to commence in the fourth quarter of this year.
Operations
The primary revenue center for the Company will come from the ongoing care of individuals that have developmental or intellectual disabilities and require a group home setting. The Company will offer a number of services that allow these individuals to thrive, including transportation to work, ongoing supervision, and meal preparation.
The Company will also coordinate with therapists and care providers, so that specific services can be rendered on site when a client needs specialized therapies.
The third section of this group home business plan will discuss the operations of the business.
The Financing
As noted above, the Company is seeking $525,000 loan to commence operations. This document assumes that the Company will receive a 25-year loan carrying a 7% interest rate. Primarily, these funds we use for the acquisition of real estate as well as furniture, fixtures, and equipment.
Moving forward, the Company would be a strong candidate for expansion capital given the highly recurring revenue produced from monthly housing fees. This document assumes that the business will not secure any additional funding over the next five years.
The Future
The Company will reach us maximum capacity quite quickly given the ongoing demand for adult care facilities in the greater Johnson County area. After the fifth of operation, the Company may establish an additional location within the target market area.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The requierd capital will be allocated toward the following:
2.2 Management and Investor Equity
The Founder is the 100% owner of Group Home LLC.
2.3 Exit Strategies
In the event that it is financially prudent to do so, the Company will coordinate with a qualified business broker in order to diverse the business to a third-party. Given the economic stability of this business, the Company would be able to quickly find a buyer (especially since the property would be at maximum capacity).
3.0 Operations
As noted in the executive summary, the Company will be actively involved with providing group home service services for adults that have intellectual or developmental disabilities. The Company will focus on providing an atmosphere that has a home like feel while also ensuring that each resident receives the care that they need.
The Company will employ a house manager as well as to support staff individuals so that a caretaker is available 24 hours per day. The Company will also have a number of healthcare providers on retainer in the event that an emergency occurs. As part of the Company’s operations, the business will coordinate with residents’ existing therapists and caregivers in order to ensure that the services offered are completed in compliance with what is expected by their care team.
The Company will also provide onsite meals, which will be served in a group setting. The Company will focus on also providing life skill development, including meal preparation, general financial management, as well as other skill development program is based on the abilities of the resident.
4.0 Overview of the Organization
4.1 Registered Name
Group Home LLC. The Company is registered as a limited liability company in the State of Kansas.
4.2 Commencement of Operations
The Company will commence operations in the fourth quarter of this year.
4.3 Mission Statement
To provide a safe group home setting for adults at a cost-effective price.
4.4 Vision Statement
To become the preeminent group home care facility in the Johnson County market.
4.5 Organizational Objectives
• Established ongoing relationships with referring professionals in Johnson County.
• Adhere to all regulatory frameworks regarding the operation of group homes.
• Maintain physically sound protocol so if the business is able to remain profitable at all times.
• Leverage multiple forms of online marketing to create awareness within the Johnson County market.
• Properly retain individuals that know how to work with individuals with special needs.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the group home business plan will focus on the current economic climate, the industry, the resident profile, and the ongoing competition of the business will face.
At this time, the economic climate in the United States is moderate. As a result of changing trade policies, as well as adjustments to fiscal policy, there has been a significant degree of inflation introduced to the economy. It should be noted that the Federal Reserve and other government agencies are taking appropriate measures to bring down the rate of inflation.
However, any issues with the economy will not impact the group home’s ability to generate revenue. There is a significant demand among families within the Johnson County market to have access to a facility that can provide proper care for their loved ones.
5.2 Industry Analysis
As of this year, the group home industry generates approximately $40 billion per year. The growth of this industry is expected to remain strong in the coming years given that many families that have individuals with developmental disabilities for intellectual disabilities are seeking appropriate accommodations that allow them to thrive in a residential setting.
5.3 Customer Profile
Any individual that has a developmental or intellectual disability is a potential resident. It is expected that the effective target market radius for the group home is 30 miles. These individuals will have the ability to afford the $1,500 per month fees associated with a group home.
5.4 Competitive Analysis
The Company will face the moderate degree of competition as a establishes its operations in Johnson County, Kansas. Once the businesses at full capacity, the competitive issues will abate significantly. At this time, the demand for group home facilities within this market exceeds that of available supply.
6.0 Key Strategic Issues
6.1 Sustainable Operations
Group Home will have sustainable operations as a result of the following:
• Recurring reams of revenue from the ongoing services provided to the Johnson County community.
• The Company’s revenues are relatively immune from negative changes in the economy.
• The Founder has more than 20 years of experience operating group home facilities.
6.2 Basis of Growth
The Company will expand via the following methods:
• Continued expansion of the number of locations operated by the business.
• Establishment of ongoing referral relationships with social workers and caer professionals when vacancies occur.
• Continued to expansion of the Company’s marketing campaigns to increase brand visibility.
7.0 Marketing Plan
7.1 Marketing Objectives
• Established referral relationships with professionals that work with individuals with developmental and intellectual disabilities.
• Maintain an expansive online presence, so the business can be quickly found when relevant searchers are conducted.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• First year revenue will reach $414,000.
• The business will operate at full capacity by the end of the year.
Year 2
• Revenue will increase by 6%.
• Revenue will reach $438,000.
Years 3-5
• By the fifth year of operation, aggregate top line income will reach $522,000.
• Gross profits will reach $496,000.
7.4 Marketing Strategies
The ongoing marketing required by the group home is relatively limited. The Company will be engaging in a laser focused marketing campaign that will target families that have individuals that with developmental or intellectual disabilities.
As part of this campaign, the Company will establish ongoing referral relationships with social workers, as well as healthcare professionals in Johnson County, that will provide ongoing referrals among individuals that are strong candidates for residential living facilities like that of the Group Home.
The Company will maintain an expanse of online presence that showcases that facility in Johnson County. This website will undergo a moderate degree of surge optimization that when searches for adult homes or group homes are conducted, the Company’s website will appear frequently in the search. This type of marketing will take approximately six months to become effective, and Management was established these campaigns during the development process.
As a community minded enterprise, the Company will provide ongoing financial support for organizations that assist individuals that have intellectual and developmental disabilities.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• The Company will achieve a compounded annual growth rate of 6%.
• The Company will acquire a $525,000 loan.
• Management will contribute $50,000 towards the venture.
9.2 Financial Highlights
• Highly recurring streams of revenue produced for monthly rental fees.
• Moderate revenues from providing specialized services to residence.
9.3 Sensitivity Analysis
The Company’s revenues are non-sensitive to negative changes in the economy. The business is providing a safe residential group home for individuals with intellectual and developmental disabilities is an absolute necessity. The Company will have highly controllable operating costs as a function of revenue, which will further contribute to this ability of the business.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
Appendix A – SWOT Analysis
Strengths
• The operations of the business are highly scalable through the ongoing development of additional locations.
• The Company will be able to offer a number of supportive services onsite, including life skill development.
• Strong demand in Johnson County for group home facilities.
Weaknesses
• Complex operations given that this business operates 24 hours a day.
• Moderate complexity related to on boarding residence.
Opportunities
• Establishment of additional locations in Kansas.
• Continued to expansion of the Company’s marketing campaigns, which shall facilitate the development of additional locations.
• Hiring of additional personnel.
Threats
• Ongoing issues with inflation could cause the operating cost of the business to increase significantly.
Appendix B – Risk Analysis
Development Risk – Low
The Company has already sourced the location that will be used for the business’ group home operations. The primary matter that needs to be addressed is the funding discussed in this document.
Financing Risk – Low/Moderate
The $525,000 a capital required will be principally used for real estate acquisition. The risks of this financing or offset by the substantial contribution margins and recurring nature of revenue.
Marketing Risk – Low
The Company will use the marketing strategies discussed earlier in order to onboard residents for the Company’s group home. The direct outreach initiatives of social workers will reduce these risks.
Management Risk – Low
The founder has more than twenty years of experience working with adults with developmental intellectual disabilities with a group home setting. He will be able to bring the operations to profitability quickly.
Valuation Risk – Low
The valuation risk is offset by:
• Recurring streams of revenue from group home fees.
• Strong demand in the Johnson County market will ensure that 100% capacity is reached quickly.
• The property will appreciate during the time that it is held.
Exit Risk – Low
As noted earlier, there would be a significant demand for this type of enterprise, given its recurring nature of revenue and economic stability. The sale of the business is not expected to occur for a significant period of time.